Kyushu Electric to buy Chevron LNG from Gorgon project in Australia

January 24, 2011

Source: Chevron

Chevron Corporation (NYSE: CVX) has signed a Sales and Purchase Agreement (SPA) with Kyushu Electric Power Co. for a portion of Chevron’s offtake of liquefied natural gas (LNG) from the Gorgon Project.

Under the binding agreement, Kyushu Electric will receive 0.3 million tons per annum (MTPA) of LNG from the Gorgon Project for up to 20 years beginning in 2015.

“We are pleased to have reached this milestone with Kyushu Electric, one of the leading companies in the world’s largest LNG market, and we look forward to expanding this relationship in the future,” said John Gass, president, Chevron Global Gas. Kyushu Electric and Chevron Australia also have existing Heads of Agreements in relation to LNG and equity sales from Chevron’s Wheatstone Project.

The Kyushu agreement was also welcomed by Jim Blackwell, president, Chevron Asia Pacific Exploration and Production Company. “Both the Gorgon and Wheatstone projects are positioned to meet the growing demand for natural gas in the Asia-Pacific region. Gorgon is more than a year into construction and remains on track to produce first gas in 2014. We expect to make a final investment decision on Wheatstone in 2011.”

Chevron is the operator of the Gorgon Project and has an approximate 47 percent interest.

The initial Gorgon Project development, in northwestern Australia, will include a three-train, 15 MTPA LNG facility and a domestic gas plant.

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